Segmentation

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  • 1. Market Segmentation With a large country Many different types of people - it is too difficult to create a product that will satisfy everybody, that is why we focus on a segment of the total market
  • 2. Market Segmentation Defn “Grouping people according to their similarity related to a particular product category”
  • 3. Market Segmentation Characteristics age gender geographic location income spending patterns cultural background demographics marital status education language mobility
  • 4. Market Segmentation 4 commonly used bases for Segmentation Descriptive geographic location demographic Behavioural psychographic benefits
  • 5. Basis for Market SegmentationSlide 3-7
  • 6. Market Segmentation geographic location - based upon where people live[ a popular way of dividing markets) demographic - based upon age, gender and income level (very often used)
  • 7. Market Segmentation Psychographic / lifestyles - based on people’s opinions, interests, lifestyles benefits - based on the different expectation that customers have about what a product/service can do for them
  • 8. Geographic Segmentation The reason why we study geographic segmentation is because WHERE people live has a big effect on their consumption patterns.
  • 9. Demographic Segmentation Demographic Segmentation is the most common approach to Market Segmentation Variables are: • age • gender (male/female) • income • occupation • education • household (family - style) size
  • 10. Demographic Segmentation Demographic Segmentation is the most common approach to Market Segmentation Variables are: • gender (male/female)gender (male/female) •gender is an obvious way to divide the market into segments since so many products are gender-specific • clothing • medical products • sports products/services • entertainment Examples ??
  • 11. Demographic Segmentation Demographic Segmentation is the most common approach to Market Segmentation Variables are: age • age is another obvious way to divide the market into segments since so many products are based upon “time of life” Examples ??
  • 12. Demographic Segmentation age • also, people have different consumption patterns at different ages Examples ??
  • 13. Demographic Segmentation Demographic Segmentation is the most common approach to Market Segmentation • Segmenting by the “stages in the family life cycle • There are different buying characteristics of people in each stage of the family
  • 14. Demographic Segmentation •household (family - style) size BUYING PATTERNS • 0-5 young children • 6-19 school children • 20-34 young adults • 35-49 younger middle-aged • 50-64 older middle-aged • 65+ seniors • 80+ SUPER seniors
  • 15. Demographic Segmentation •household (family - style) size FAMILY LIFE CYCLE STAGES a. Young Single b. Young Married with no Children c. Young - married with children
  • 16. Demographic Segmentation •household (family - style) size FAMILY LIFE c. married with children d. divorced with children e. married without dependent children f. divorced without dependent children
  • 17. Demographic Segmentation •household (family - style) size FAMILY LIFE CYCLE STAGES 5. Older a. older married b. older unmarried (divorced, widowed)
  • 18. Demographic Segmentation Demographic Segmentation is the most common approach to Market Segmentation Variables are: • age • gender (male/female) • income • occupation • education • household (family - style) size
  • 19. Demographic Segmentation income Segmenting markets on the basis of income and expenditure patterns
  • 20. Psychographic Segmentation “The use of psychological attributes, lifestyles and attitudes in determining the behavioral profiles of different customers” The use of detailed information to understand differences in what people buy psychological
  • 21. Psychographic Segmentation Psychographic profiles on a target market segment are obtained by doing a lot of questionnaires and surveys to ask people if they agree/disagree with certain statements made about particular activities, interests or opinions AIO - activities, interests, and opinions
  • 22. Benefit Segmentation “It is based on the Attributes (characteristics) of products, as seen by the customers” example, people buy something because it causes a benefit
  • 23. Benefit Segmentation “Many marketers now consider benefit segmentation one of the most useful methods of classifying markets”
  • 24. Segmentation Bases for Industrial Markets Slide 3-12 Segmentation for Industrial Markets
  • 25. Geographic Segmentation useful for the automotive industry Product Segmentation ie. Special parts and components Segmentation by End-Use Application ie. Paint mfg. Paint for waterproof applications, paint for rust prevention, paint which sticks to glass Segmentation for Industrial Markets
  • 26. Pharmaceutical Segmentation Pharmaceutical segmentation can be done for four categories of products. The first is for consumer or prescription products. Second for Institutional market products. Third, the Industrial market products and finally OTC (Over the counter) or non prescription products.
  • 27. Pharmaceutical Segmentation For pharmaceutical companies what is important is the prescription markets. pharmaceutical market for prescription can be sub divided into two categories: 1. Doctors or Intermediate Customer 2. Patients or consumer
  • 28. Pharmaceutical Segmentation 1. Segmentation on the bases of Intermediate customer (Doctor): Doctors can be classified on the basis of their a. Age (Old Doctors, Young Docotrs, Interns), b. Speciality (Cardiologists, Diabetologists, Orthopedician, Opthalmologist etc.) c. Place of Practice (Urban, Rural, Govt Hospitals, Private clinics)
  • 29. Pharmaceutical Segmentation ) d. General Practitioners e. Type of Practice (Prescribing/Dispensing) f. Usage rate of products (heavy users, light users, medium users, non users) A company need to look into so many factors because these factors would help a company to effectively plan and decide its marketing strategy.
  • 30. Pharmaceutical Segmentation 2. Segmentation on the bases of consumers: Patients can be categorized as  a. Patients with similar kind of illness e.g.. diabetic patients b. Patients with similar stage of illness (acute illness / chronic illness) c. Patients according to their age group (pediatric patients, geriatric patients, young patients etc.) d. Patients according to their gender (male and female patients)
  • 31. Pharmaceutical Segmentation Institutional market comprises of large hospitals who purchase in bulk and directly from the companies. Pharmaceutical companies need to identify the profitable hospitals on the basis of their size and how much business they can generate. Some companies have a separate department or division to cater to the needs of institutional market. .
  • 32. Pharmaceutical Segmentation Industrial market comprise of buyers of bulk drugs or active pharmaceutical ingredients. It also includes pharmaceutical machinery suppliers
  • 33. Pharmaceutical Segmentation OTC market includes consumer who purchases certain medicines that do not require a prescription from doctor.